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Mergers and Acquisitions

Mergers and acquisitions are business considerations or business agreements in which two or more firms combine forces to develop or co-market a product (merger) or in which one company buys out the assets and assumes the obligations of another firm (acquisition).

One way or another, there is always a valid business strategy behind those options: A company may find that the most cost effective method of entering a new market is simply to buy an existing company that serves that market. On the other hand, a company may determine that two companies together are stronger and more valuable than two separate companies, especially during tough times.

Merger

Mergers and acquisitions can be structured in several forms:

  • Vertical mergers
  • Horizontal mergers
  • Conglomerate
  • Consolidation

Factors that are considered for mergers and acquisitions are:

  • Cost of the transaction
  • Benefits
  • Synergy
  • Tax and legal issues

Some of the benefits of mergers and acquisitions are:

  • Economy of scale
  • Economy of scope
  • Staff reduction
  • New technology
  • Market reach and industry visibility
  • Better management
  • Quality improvement
  • Tax advantages
  • Value creation

Are you thinking about or planning a merger orconsidering the acquisition of another company? Talk with theteam of advisers at TWC Finance today to benefit from their expertise and to gain some useful tools.